Correlation Between Redsense Medical and Zwipe AS

Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Zwipe AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Redsense Medical and Zwipe AS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Redsense Medical AB and Zwipe AS, you can compare the effects of market volatilities on Redsense Medical and Zwipe AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Redsense Medical with a short position of Zwipe AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Zwipe AS.

Diversification Opportunities for Redsense Medical and Zwipe AS

0.42

Correlation Coefficient

Redsense Medical  Zwipe AS

Very weak diversification

The 3 months correlation between Redsense and Zwipe is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Zwipe AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zwipe AS and Redsense Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Redsense Medical AB are associated (or correlated) with Zwipe AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zwipe AS has no effect on the direction of Redsense Medical i.e., Redsense Medical and Zwipe AS go up and down completely randomly.

Pair Corralation between Redsense Medical and Zwipe AS

Assuming the 90 days trading horizon Redsense Medical AB is expected to generate 0.3 times more return on investment than Zwipe AS. However, Redsense Medical AB is 3.31 times less risky than Zwipe AS. It trades about -0.02 of its potential returns per unit of risk. Zwipe AS is currently generating about -0.02 per unit of risk. If you would invest  684.00  in Redsense Medical AB on September 13, 2024 and sell it today you would lose (34.00) from holding Redsense Medical AB or give up 4.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Redsense Medical AB  vs.  Zwipe AS

Redsense Medical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Redsense Medical AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Redsense Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Zwipe AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zwipe AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Redsense Medical and Zwipe AS

The main advantage of trading using opposite Redsense Medical and Zwipe AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Zwipe AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zwipe AS will offset losses from the drop in Zwipe AS's long position.

The idea behind Redsense Medical AB and Zwipe AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.